Per Shri P.N. Kashalkar – Hon’ble Presiding Judicial Member:

(1)          Being aggrieved by the judgement passed by the District Consumer Disputes Redressal Forum, Raigad, in Consumer Complaint No.01/2009 decided on 12/05/2009, where while  allowing the complaint partly, the Forum below directed the Insurance Company - Opposite Party to pay insurance amount of `.2,00,000/- with interest @8% per annum from 01.09.2007 and also directed to pay `.10,000/- for compensation for mental harassment and `.2,000/- by way of cost.  As such, Insurance Company has filed this appeal, taking strong exception to the award passed by District Forum.

(2)          Facts to the extent material may be stated as under:

Complainant is a Surgeon residing at Karjat, District Raigad.  He had taken medical insurance policy for himself and his family on 31.10.2006.  The policy was to be in force upto 31.10.2007.  The sum assured was `.2,00,000/-.  According to Complainant when he had gone to Akola on 03.04.2007 because of heat stroke there was bleeding from his nostrils and mouth.  He therefore returned home and went to Paramount Hospital, Panvel and thereafter he was admitted to Lilavati Hospital, Mumbai, as indoor patient  and was discharged on 16.04.2007.  On 14.05.2007 he lodged claim with Opposite Party No.2 - Paramount Health Services Pvt. Ltd.,  the agent of Insurance Company (original Opposite Party No.1).  Opposite Party No.1 sent letter and called for certain information.  However, Opposite Party No.1 Insurance Company repudiated the claim by sending letter dated 02.6.2008.  Hence, he sent registered notice through his Advocate on 17.06.2008 to both the Opposite Parties, but, despite notice they had not taken any steps to sanction his mediclaim amount and therefore, he filed consumer complaint against Opposite Party No.1 - Insurance Company and Opposite Party No.2 – M/s. Paramount Health Services Pvt. Ltd.

(3)          Opposite Party No.1 filed written statement and denied the allegations made by the Complainant.  According to Opposite Party No.1, Complainant had not given true and correct information about his previous ailment in the proposal form.  As per information gathered by the Insurance Company, Complainant was suffering from tuberculosis from 1982 and in 1987 he had undergone surgery on his liver.  Some portion of the liver was removed in the said surgery.  Thereafter, in 1988 he was admitted in Lilavati Hospital for throcoplasty.  The Insurance Company, therefore pleaded that, from the beginning Complainant was not having normal respiratory capacity and because of various surgeries performed it has been substantially reduced.  This was concealed by the Complainant from the Insurance Company while giving answers in proposal form.  Had he disclosed the said information, Opposite Party No.1 pleaded that they would have either not accepted the proposal and issued medical policy or would have taken higher amount of premium to give cover of the mediclaim policy.  The Insurance Company therefore pleaded that, since there was material concealment of facts by the Complainant while taking Insurance mediclaim policy, they had rightly repudiated the insurance claim citing condition 4.1 of the terms and conditions of the policy and therefore, they were not guilty of deficiency in service.

(4)          On the basis of affidavits and documents placed on record, the Forum below, however, held that Insurance Company was guilty of deficiency in service.  The fact that Respondent was suffering from tuberculosis about 20 years back or that in 1987 the left upper lobe of his liver removed from surgery or that he was required to undergo throcoplasty in 1988, there was no material fact required to be disclosed by the Insured while taking mediclaim policy.  But, on this ground repudiation was made by the Insurance Company and that too repudiation was made after 10 months citing pre-existing disease not disclosed by the Complainant.  The Forum below observed that Complainant was quite O.K. from 1988.  There was no pre-existing disease, the past history of his ailment was not told by the Complainant.  The Forum below, therefore did not agree with the submission of the Insurance Company and relying on judgement of Delhi State Commission in the case of United India Insurance Co. Ltd. V/s. R.L. Mahajan [IV(2007) CPJ 195], the Forum below held that disease of 20 years need not be disclosed by the insured while taking medical policy and on that ground the repudiation made by Insurance Company was not proper and therefore, it allowed the complaint and directed to pay sum of `.2,00,000/- to the Complainant with interest @8% per annum.  The Forum below awarded `.10,000/- for mental harassment and `.2,000/- as cost.  As such, Insurance Company has filed this appeal.

(5)          We heard Ms.Harshada Rane, Advocate for the Appellant and Ld. Advocate Mr.Anand Patwardhan, Advocate for the Respondent.

(6)          Vide the letter of repudiation sent by National Insurance Co. Ltd., the Opposite Party No.1 to the Complainant dated 28.05.2008 it was informed to the Complainant that his claim for the above policy was not payable on the ground that the patient was having history of tuberculosis since 1982, he had taken treatment for 6 years, underwent left lobectomy in 1987 and again underwent left thoracesplasty one year later and he was also having history of hamoptysis in 1999.  Since his proposal was fresh one, for the pre-existing disease as per Policy Condition 4.1, the claim is not admissible under the policy and therefore, they are closing the case as No Claim.

(7)          Opposite Party No.2 also sent letter styled as claim status to the Complainant on 29.11.2007 wherein Paramount Health services Pvt. Ltd., clearly mentioned that this claim preferred by the Complainant was not admissible due to pre-existing disease nature of the ailment hence they recommended for repudiation under policy condition 4.1.  It was also informed to the Complainant that all above ailments were not disclosed by the claimant while taking the policy as per proposal form and therefore, on that count the claim is not payable.

(8)          We are finding that Forum below erred in law in ignoring Condition No.4.1 of the mediclaim policy -  Pre-existing diseases are excluded from mediclaim policy.  In the form supplied for mediclaim policy from the Opposite Parties, the Complainant had not disclosed any disease he was having or he was suffering from.  In medical history column, so many questions were asked in the proposal form and in most of the questions answers given were in the negative.  The only answer given in affirmative is that ‘Are you in good health and free from physical and mental diseases or infirmity or medical complaints?  He was asked, have you suffered from any respiratory or allergic disease, his answer was No.  He was asked, whether any other complaint requiring specialist’s consultation or surgical or hospital treatment or investigation was taken, his answer was No.  He was further asked, if he was having any other illness or diseases or accident or operation sustained by him, answer was No.  So, all the answers given in proposal form were in the negative.  Whereas, the Insurance Company found that the Complainant had undergone 2/3 operations and he was treated for tuberculosis, his left liver lobe was removed in operation.  He had also undergone operation of throcoplasty, therefore, it appears that the Respondent herein concealed material facts from the Insurance Company.    If he would have disclosed these facts in the proposal form, the Insurance Company either would have rejected the proposal or would have given the insurance policy to the Respondent by charging higher premium.  The contract of insurance is based on utmost good faith.  If utmost good faith principle is not followed by either of the parties to the contract of Insurance, the contract becomes void.  In this case, since, Respondent had not disclosed any material facts regarding his disease of tuberculosis, regarding his 2/3 operation performed, he is guilty of not disclosing material facts germen to the issue and therefore, we agree with the Ld.Counsel for the Appellant that, since, Respondent had concealed material facts, there has been violation of principle of Section 45 of the Insurance Act.  The utmost good faith was violated in this case by the Respondent and therefore, Insurance Company was justified in repudiating the claim preferred by the Respondent herein.  The Forum below erred in law in allowing the complaint, ignoring this vital aspect of the matter. Forum below simply lavishly granted award to the Complainant turning Nelson’s eye to the various operations suppressed and not disclosed by the Respondent while taking mediclaim policy.  In the circumstances, by allowing this appeal, award passed by the Forum below is required to be quashed and set aside.  Hence, we pass the following order:

O  R  D  E  R

     (i)       Appeal is allowed.

    (ii)       Order passed in Consumer Complaint No.1/2009 by District Consumer Disputes Redressal Forum, Raigad is quashed and set aside.

  (iii)       Complaint stands dismissed.

  (iv)       Parties are left to bear their own costs.